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Gini Silk Mills


The company operates in the textile industry – processing and selling fabrics. 

It focuses on heritage and craft fabrics and uses dyes/plain fabrics to create printed fabrics. 

The company has reported very modest growth in revenues and operating profits over the last five years – reporting 4cr of operating profits on revenues of 36cr in the last financial year. It employed no net debt in financing its operations and held about 9cr in liquid investments, primarily in equity mutual funds.

The industry is blighted by government policies that work against domestic players such as propping up of ‘zombie’ units (to preserve employment) and export restrictions on cotton yarn and other related products.  The company is forced to import fabrics due to the lack of domestic supplies, resulting in exposure to a weakening INR.  Moreover, the US and Europe account for over 60% of Indian textile exports, resulting in substantial diminution in the industry’s overall revenue as a result of their economic slowdown.

Management indicate that the industry is a bit directionless in terms of government policy resulting in uncertain estimates of future cash flows.

Management, however, indicate a focus on technical textiles (used in construction), which is dominated by industrial nations and relatively low penetration in the Indian market. 

The company also has interests in the real estate and construction industry through a partnership.  This has generated rental income and partnership profits along with interest and dividend income on other financial investments.  Needless to say, these sources of income are subject to the risks impacting real estate and the financial markets, which are underpinned by the interest rate cycle – not to mention some lack of focus in the company’s core competence, which is in textiles.
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